HBA-TYH C.S.H.B. 3020 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 3020 By: Smithee Insurance 4/16/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, health maintenance organizations (HMOs) are not subject to an existing Texas law that requires insurance companies to file withdrawal plans with the Texas Department of Insurance (department) before exiting the Texas market. The statute relating to withdrawal plans helps to stabilize the Texas insurance industry by protecting against abrupt market disruptions which may result if insurers haphazardly leave the state. The statute protects consumers, requiring insurers to continue to service their Texas business in an orderly fashion and maintain a Texas presence until their claims are fully paid. The state allows the commissioner of insurance, after notice and hearing, to require that a deposit be maintained in this state if there is reasonable cause to believe that the interests of the public are best served by such a deposit. The exclusion of HMOs from the withdrawal plan statute is a concern because the Texas HMO industry has been suffering substantial losses. On an industry-wide basis, HMOs operating in Texas have consistently lost money every quarter for several years. No protection currently exists to pay the claims of an HMO that goes into receivership. C.S.H.B. 3020 subjects HMOs to existing Article 21.49-2C, Insurance Code, requiring HMOs to file withdrawal plans with the department before exiting the state. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Article 20A.26, Insurance Code (Texas Health Maintenance Organization Act), to provide that a health maintenance organization (HMO) authorized under this article is subject to Article 21.49-2C (Withdrawal Plan), Insurance Code, requiring an HMO to file withdrawal plans with the Texas Department of Insurance before exiting the state, and is an authorized insurer for the purposes of that article. Makes conforming changes. SECTION 2. Effective date: September 1, 1999. SECTION 3. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute modifies the original bill in SECTION 1 by providing that an HMO authorized under this article (Texas Health Maintenance Organization Act) is an authorized insurer for the purposes of Article 21.49-2C (Withdrawal Plan), Insurance Code.